Credit Repair Options

Credit Repair Secrets

It's no secret how to make financial hot water - too much debt in proportion to too little income. Sometimes, though, the income is there but a disciplined approach to financial planning is missing. Whichever situation describes the source of your financial woes, here are some credit repair secrets that can help you overcome your current unfortunate situation and put you on the road to financial recovery:

Pay all monthly household expenses in full. Late payments are expensive enough but partial payments are even worse. They add to the financial burden by not eliminating debt and they make late fees accrue even faster.

Review your discretionary income. This is the money you have left over after paying monthly household expenses. No more than 15% of this discretionary income should go toward paying credit card and gasoline card payments, car notes, student loans, and all payments to credit accounts established elsewhere, such as department stores.

Review your credit report once a year. Most lenders turn to one or more of the three largest credit reporting companies operating in the United States. They're TransUnion, Experian, and Equifax. Federal law requires them to provide every consumer with a free current credit report once a year. It's available for the asking. Ask for it and review it carefully. Report any discrepancies or mistakes immediately and work with the credit reporting company in question to solve any disputes as quickly and amicably as possible.

Know your credit score. Those same three credit reporting companies assign a credit score to every consumer. This score reflects the credit worthiness of every consumer. The higher the score, the more a consumer is allowed to borrow. Higher scores usually mean lower interest rates, too. Lower interest rates can save an enormous amount of money over an extended length of time, especially when a home mortgage is in question.

Use credit cards wisely. There are many changes under way that affect consumers and their credit cards. Keep up with the latest news so you'll know how to work best with your creditors. Don't cancel unused credit cards without giving it some serious consideration. Doing so may lower your overall line of credit, a situation that can result in a lower credit score.

Turn to consumer counseling services for guidance and answers to your questions. Many of them are free and highly reputable. They're familiar with working as a liaison between consumer and creditor and will help you work out the best possible terms while maintaining the highest possible credit score.

Some secrets are best shared. Everyone these days knows someone who is also suffering from financial distress. Feel free to pass along these credit repair secrets. Someone may be very grateful that you did.